Vu1 raises $5M for lighting tech

Seattle, Wash.-based Vu1 (OTC: VUOC) said today it raised $5 million from investors through a private placement of funds.

The new stock and warrants are expected to allow the stealth lighting company to bring a limited availability of its first product for recessed lighting to the market in the second quarter of next year. The company is targeting distribution through utilities within the U.S., with an eye on Europe for mid-2010. 

The U.S. market is driven by legislation last December that banned inefficient incandescent light bulbs by 2012. Other governments have followed suit (see European Union to phase out incandescent light bulbs).

Ron Davis, chief marketing officer of Vu1, told the Cleantech Group that the company could produce 6 million bulbs annually from its manufacturing facility in the Czech Republic, run by its wholly owned subsidiary Sendio (an anagram of Edison, Davis joked). The lighting technology fits into standard light bulbs, which Vu1 plans to buy from suppliers.

Vu1 says the lighting uses accelerated electrons to stimulate phosphor, which creates light and makes the bulb glow. The technology is similar to what's used in liquid-crystal displays and cathode ray tubes but has been modified for this application.

"We create electrons and luminescence in a far-more efficient way that gives long life to the bulb with good-quality light," Davis said.

See the light bulb here »

The company's technological claims have not been third-party verified, but Davis said officials are in talks with various testing groups, such as Underwriters Laboratories, for the necessary tests.

Vu1 claims the bulbs are comparable to compact fluorescent lamps (CFLs) on lifespan and energy efficiency. Vu1 says its 18-watt bulb lasts about 6,000 hours at 36 lumens per watt, with a price tag of $10 to $17.

Davis said the dimmable bulbs lack the mercury content of CFLs, while falling in a much-lower price range than the corresponding light-emitting diode (LED) technology. Davis said CFL bulbs are a stop-gap measure until a better lighting technology hits the market, but CFLs have seen record sales in the past year (see Light bulb maker increases daily CFL production).

Vu1 was born out of bankrupt flat-screen technology company Telegen, which was reorganized by its board of directors. The board appointed a new management team that decided to focus on lighting in 2004. Vu1 announced its new name when it emerged from stealth mode in June.

The company has spent about $7 million on research and expects to raise more capital in early 2009 before volume production begins. The staff is about 19, many currently working as contractors or consultants, and 50 in the Czech factory. Vu1 is in the search for a CEO.

The company is pursuing utilities as customers first because they are less price-sensitive because of money allocated for energy efficiency initiatives. The utilities are also more predictable customers than those at retail stores, Davis said. Eventually, the company hopes its products will be on sale in traditional retailers.

The current product offering is for recessed lighting, especially for homes, but the technology is applicable to many forms of light delivery, Davis said, including fluorescent tubes or A-Bulbs. The products are designed to fit into existing light fixtures.

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